By Meghan Hall
Google’s unquenched thirst for space in Kirkland has the mammoth tech firm leasing up more offices on the Eastside near its Sixth Street and South Campus. The company has agreed to take about 182,000 square feet in two separate transactions, according to the Puget Sound Business Journal, who sites a Google spokeswoman and industry sources.
The first deal was signed with Spokane, Wash.-based SRM Development, who is planning to construct a 136,000 square foot office building at 503 Sixth St. S. Google expects to move into the building, located just north of its expanding campus, in 2022.
SRM’s relationship with Google is not new; the developer originally worked to build both phases of Google’s Kirkland campus on Sixth Street. Phase I features 195,000 square feet of office space as well as two restaurants, a doctor’s office, message clinic, fitness center, game rooms and a climbing wall. Phase II added an additional 180,000 square feet of offices and two levels of underground parking, as well as infrastructure improvements to connect both phases on the seven-acre campus.
The second lease was for about 46,000 square feet at 720 Fourth Ave. in Central Way Plaza, close to the Kirkland Urban campus, the 400,000 square foot office portion of which Google acquired for $435.7 million for in the fall of 2019. The owner of Central Way Plaza is Northstream Development Co. Inc., founded by Linda Nordstrom, granddaughter of John W. Nordstrom. The building, which totals 91,128 square feet, was originally constructed by Northstream in 1998. The property sits just adjacent to Kirkland Park Place, anchored by a QFC and 24-Hour Fitness.
Google opened its first Washington office back in 2004 in Kirkland, and has since grown to more than 4,500 employees across the Puget Sound. If Google allocates 150 square feet per employee—an industry standard—its new offices could accommodate an additional 1,200 workers.
The leases come at a time when Eastside office vacancy continues to reach historic lows. Companies such as Google, Facebook, Amazon and others were the main drivers of Eastside office absorption in 2019, a trend that will likely continue in 2020 notes Broderick Group in a 2019 fourth quarter report.
The entire Eastside office market totals about 35.6 million square feet, and vacancy at the end of the year landed at 6.45 percent. Kirkland itself had a vacancy rate of 4.4 percent at the end of the year, and offices rented for between $35 and $48 triple net. With companies such as Google not only leasing existing space, but new development that has yet to be completed, these rates are expected to rise as the Eastside market’s notoriety, and therefore desirability, continue to rise.